415 INVESTMENT MANAGEMENT ACTIVITIES
a. In the case of accounts created by corporations, business firms, organizations or institutions, the voluntary written agreement or indenture entered into by the parties, accompanied by a copy of the board resolution or other evidence authorizing the establishment of and designating the signatories to, the investment management account.
b. In the case of accounts created by individuals, the voluntary written agreement or indenture entered into by the parties.
(1) Pre-numbered contractual agreement form;
(2) Title or nature of contractual agreement in noticeable print;
(3) Legal capacities, in noticeable print, of parties sought to be covered;
(4) Purposes and objectives;
(5) The initial amount of funds and/or value of securities subject of the arrangement delivered to the investment manager;
(6) Statement in underlined noticeable print that:
(a) The agreement is an agency and not a trust agreement. As such, the client shall at all times retain legal title to funds and properties subject of the arrangement;
(b) The arrangement does not guaranty a yield, return or income by the investment manager. As such, past performance of the account is not a guaranty of future performance and the income of investments can fall as well as rise depending on prevailing market conditions; and
(c) The investment management agreement is not covered by the PDIC and that losses, if any, shall be for the account of the client;
(7) Duties and powers of the investment manager;
(8) Liabilities of the investment manager;
(9) Reports to the client;
(10) The amount or rate of the compensation of the investment manager;
(11) Terms and conditions governing withdrawals from the account;
(12) Termination of contractual arrangement; and
(13) Disclosure requirements for transactions requiring prior authority and/ or specific written investment directives from the client.
a. Traditional deposit products of UBs/KBs in the Philippines with long-term credit rating of at least AA- or its equivalent by a third party credit assessment agency recognized by the Bangko Sentral;
b. Evidences of indebtedness of the Republic of the Philippines and of the Bangko Sentral, and any other evidences of indebtedness or obligations where the servicing and repayment of which are fully guaranteed by the Republic of the Philippines or loans against such government securities;
c. Loans fully guaranteed by the Republic of the Philippines as to the payment of principal and interest;
d. Tradable securities issued by the government of a foreign country or any supranational entity with long-term credit rating of at least AA- or its equivalent by a third party credit assessment agency recognized by the Bangko Sentral;
e. Loans fully secured by a hold-out on, assignment or pledge of deposits maintained either with the bank proper or other banks, or of deposit substitutes of the bank, or of mortgage and chattel mortgage bonds issued by the investment manager; and
f. Loans fully secured by real estate or chattels in accordance with Sec. 303 and Secs. 143 (Credit classification and provisioning) and 301 (Additional requirements).
a. The transaction to be entered into;
b. Name of the issuer or borrower;
c. Amount involved; and
d. Terms of the security, including collateral, if any.
a. Lend, sell, transfer or assign money or property to any of the departments, directors, officers, stockholders, or employees of the investment manager, or relatives within the first degree of consanguinity or affinity, or the related interests of such directors, officers and stockholders; or to any corporation where the investment manager owns at least fifty percent (50%) of the subscribed capital or voting stock in its own right and not as trustee nor in a representative capacity;
b. Purchase or acquire property or debt instruments from any of the departments, directors, officers, stockholders, or employees of the investment manager, or relatives within the first degree of consanguinity or affinity, or the related interests of such directors, officers and stockholders; or from any corporation where the investment manager owns at least fifty percent (50%) of the subscribed capital or voting stock in its own right and not as trustee nor in a representative capacity;
c. Invest in equities of, or in securities underwritten by, the investment manager or a corporation in which the investment manager owns at least fifty percent (50%) of the subscribed capital or voting stock in its own right and not as trustee nor in a representative capacity; and
d. Sell, transfer, assign or lend money or property from one trust, fiduciary or investment management account to another trust, fiduciary or IMA except where the investment is in any of those enumerated in Items “a” to “d” of lending and investment disposition under lending and investment disposition under this Section.
a. The transaction to be entered into;
b. Identities of the parties involved in the transaction and their relationships (shall not apply to Item “d” of this Section under Transactions requiring prior authority );
c. Amount involved; and
d. Collateral security(ies), if any.
a. Requirements of Sections 39 and 40 of R.A. No. 8791 (The General Banking Law of 2000);
b.Criteria for past due accounts;
c. Qualitative appraisal of loans, investments and other assets that may require provision for probable losses which shall be booked in accordance with the FRPTI;
d.Requirements of Sections 3 and 8 of the SRC; and
e. Provisions of Section 44 – Investments by Philippine Residents – of the FX Manual, such that the cross-currency investments of peso IMAs, shall be subject to the following conditions:
(1) All cash flows of the investment manager shall only be in pesos. In case the foreign exchange acquired or received by the principal as dividends/earnings or divestment proceeds on such investment are intended for reinvestment abroad, the same proceeds are not required to be inwardly remitted and sold for pesos through authorized agent banks: Provided, That such proceeds are reinvested abroad within two banking days from receipt of the funds abroad;
(2) The investment manager shall purchase, invest, reinvest, sell, transfer or dispose foreign currency-denominated financial instruments, including securities as defined in Section 3 of the SRC, through a distributor or underwriter duly authorized or licensed by the government of the issuer of such instruments, or a counterparty financial institution (seller or buyer) authorized in writing by the principal and/or accredited by the investment manager: Provided, That, the conduct, documentation, and settlement of any of these transactions shall be outside Philippine jurisdiction;
(3) The investment manager shall record cross-currency investment transactions in the peso regular books at their foreign currency amounts and their local currency equivalent using the Philippine Dealing System peso/US dollar closing rate and the New York US dollar/third currencies closing rate; and
(4) The investment manager shall comply with the reportorial requirements that may be prescribed by the Bangko Sentral, which shall include as a minimum, the foreign currency amount and the local currency equivalent of the total cross currency investments with details on: (a) type of investments; and (b) amount of cash flow converted.
a. The investment manager shall administer, hold, or manage the fund or property in accordance with the instrument creating the investment management relationship; and
b. Funds or property of each client shall be accounted separately and distinctly from those of other clients herein referred to as individual account accounting.
a. The investment management agreement shall only be between individuals who are Filipino citizens or resident aliens and investment manager-banks. The agreement shall be non-negotiable and non-transferable;
b. The minimum amount of investment for an IMA shall be P1.0 million;
c. The investment management agreement shall indicate that pursuant to Section 24(B)(1) of R.A. No. 8424, interest income of the investment management funds derived from investments in interest-bearing instruments (e.g., time deposits, government securities, loans and other debt instruments) which are otherwise subject to the twenty percent (20%) final tax, shall be exempt from said final tax provided the funds are held under investment management by the investment manager for at least five (5) years. If said funds are held by the investment manager for a period less than five (5) years, interest income shall be subject to a final tax which shall be deducted and withheld from the proceeds of the IMA based on the following schedule–
| Holding Period | Rate of Tax | |
| Four (4) years to less than five (5) years Three (3) years to less than four (4) years Less than three (3) years |
5% 12% 20% |
d. The investment management agreement shall indicate that pursuant to Section 24(B)(1) of R.A. No. 8424, interest income of the investment management funds derived from investments in interest-bearing instruments (e.g., time deposits, government securities, loans and other debt instruments) which are otherwise subject to the twenty percent (20%) final tax, shall be exempt from csaid final tax provided the funds are held under investment management by the investment manager for at least five (5) years. If said funds are held by the investment manager for a period less than five (5) years, interest income shall be subject to a final tax which shall be deducted and withheld from the proceeds of the IMA based on the following schedule– d. The investment management agreement shall indicate that pursuant to Section 24(B)(1) of R.A. No. 8424, interest income of the investment management funds derived from investments in interest-bearing instruments (e.g., time deposits, government securities, loans and other debt instruments) which are otherwise subject to the twenty percent (20%) final tax, shall be exempt from said final tax provided the funds are held under investment management by the investment manager for at least five (5) years. If said funds are held by the investment manager for a period less than five (5) years, interest income shall be subject to a final tax which shall be deducted and withheld from the proceeds of the IMA based on the following schedule– d. The investment management agreement shall indicate that pursuant to Section 24(B)(1) of R.A. No. 8424, interest income of the investment management funds derived from investments in interest-bearing instruments (e.g., time deposits, government securities, loans and other debt instruments) which are otherwise subject to the twenty percent (20%) final tax, shall be exempt from said final tax provided the funds are held under investment management by the investment manager for at least five (5) years. If said funds are held by the investment manager for a period less than five (5) years, interest income shall be subject to a final tax which shall be deducted and withheld from the proceeds of the IMA based on the following schedule–
e. Tax-exempt individual IMAs established under this Section shall be subject to the provisions of this Section under item “b” of Minimum documentary requirements and Minimum size of each investment management account up to Other applicable regulations on loans and investments.